BILL NUMBER: SB 1986	CHAPTERED  09/29/00

	CHAPTER   915
	FILED WITH SECRETARY OF STATE   SEPTEMBER 29, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 29, 2000
	PASSED THE SENATE   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 30, 2000
	AMENDED IN ASSEMBLY   AUGUST 29, 2000
	AMENDED IN ASSEMBLY   AUGUST 18, 2000
	AMENDED IN ASSEMBLY   JULY 6, 2000
	AMENDED IN ASSEMBLY   JUNE 21, 2000
	AMENDED IN ASSEMBLY   JUNE 15, 2000
	AMENDED IN SENATE   MAY 2, 2000
	AMENDED IN SENATE   APRIL 12, 2000

INTRODUCED BY   Senator Costa

                        FEBRUARY 25, 2000

   An act to amend Sections 44501, 44502, 44507, 44520, 44525, 44526,
44537.5, 44548, 44559, 44559.1, and 44559.2 of, and to add Sections
44504.1 and 44525.7 to, the Health and Safety Code, relating to
pollution.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1986, Costa.  Pollution.
   (1) Existing law contains legislative findings regarding the
necessity that the state, in cooperation with the federal government,
use all practical means and measures to control, remediate, and
eliminate pollution hazards to the environment, including developing
new and alternative processes and facilities that provide for the
disposal of waste products, as provided.
   Existing law authorizes the California Pollution Control Financing
Authority to finance various pollution control projects to control
and eliminate pollution hazards to the environment and defines the
term "pollution" for purposes of these financing provisions.
   This bill would revise the definition of the term "pollution" for
purposes of these provisions, to include the presence of asbestos or
lead paint, and would define the term "brownfield site" for purposes
of those provisions.  The bill would authorize the authority to
provide a loan to any city, county, school district, redevelopment
agency, financial institution, any for-profit or not-for-profit
organization, or any participating party, to assist in financing the
costs of performing or obtaining site assessments, remedial action
plans and reports, and technical assistance, or the cleanup,
remediation, or development of brownfield sites, as specified.
   The bill also would require the authority, commencing in 2002, and
annually thereafter, to submit a report to the Legislature regarding
the program.
   (2) Existing law establishes the Capital Access Loan Program,
which is administered by the authority, and defines the term
"qualified business," for purposes of that program, as a small
business concern that meets specified criteria.  The authority is
required to include specified terms in any contract that the
authority enters into with a financial institution participating in
the program, including that the business receiving a loan has
operations that affect the environment, as specified.
   This bill would revise the definition of the term "qualified
business" to specify that a business concern that meets the criteria
is a qualified business regardless of whether the small business
concern has operations that affect the environment and would delete
the requirement that the authority's contract with a financial
institution include such a condition.
   (3) This bill would incorporate additional changes in Sections
44501, 44502, 44520, and 44526 of the Health and Safety Code proposed
by AB 779, to become operative only if both bills are enacted and
become operative on or before January 1, 2001, and this bill is
enacted last.
   (4) This bill would incorporate additional changes to Section
44559.1 of the Health and Safety Code, proposed by AB 2805, to become
operative only if both bills are enacted and become operative on or
before January 1, 2001, and this bill is enacted last.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 44501 of the Health and Safety Code is amended
to read:
   44501.  (a) The Legislature hereby finds and declares that it is
necessary and essential that the state, in cooperation with the
federal government, use all practical means and measures to control,
remediate, and eliminate pollution hazards to the environment.  The
Legislature further finds and determines that industry within this
state utilizes processes and facilities that have significant
environmental impact.  These processes and facilities shall be
modified and supplemented to meet the quality standards established
and to be established for the control and remediation of
environmental pollution.  Industry needs and requires new methods to
finance the capital outlays required for the devices, equipment, and
facilities utilized in pollution control if they are to rapidly
comply with the quality standards established by the state and
federal governments, and if they are to rapidly remediate
contaminated properties so that those properties can be reused for
economically beneficial purposes.
   (b) The Legislature also finds and declares that the disposal of
waste products by current methods as incineration and landfill
pollute the environment by degrading air and water quality.  The
Legislature further finds that in order to reduce the environmental
pollution that currently occurs in connection with the disposal of
waste products, there is a need to develop new and alternative
processes and facilities that provide for the disposal of those waste
products in ways that prevent or reduce environmental degradation.
The Legislature also finds that those new and alternative processes
and facilities include those that recover resources and energy from
waste products.  The Legislature further finds and declares that in
order to prevent further environmental degradation resulting from
contamination caused by the release of waste products and hazardous
materials, there is a need to encourage the remediation of that
contamination of properties with the potential for economically
beneficial reuse.
   (c) The alternate method of financing provided in this division is
in the public interest and serves a public purpose and will promote
the health, welfare, and safety of the citizens of the State of
California.
   (d) (1) The Legislature also finds and declares that real property
contaminated with hazardous substances is a continuing blight on
communities.  Estimates suggest there are between 67,000 and 119,000
contaminated sites, commonly referred to as "brownfields," throughout
the state.  Located in existing communities, many of these sites are
abandoned, idle, or underutilized due to a combination of factors
including legal liability concerns, regulatory issues, and the costs
of pollution cleanup.  Additionally, many of the undeveloped
brownfields in the state are located within communities with
depressed land values and pressing economic need, communities often
characterized by a lack of capital investment.  The remediation and
development of brownfields is an important component of revitalizing
existing communities and supporting sustainable growth patterns.
While remediation and development activities should focus on
brownfield sites that, although contaminated, have the potential for
economically beneficial reuse, there currently exist few, if any,
sources for financing the assessment, planning, and reporting
activities that are the necessary first steps toward determining
whether a site has the potential for economically beneficial reuse.
   (2) The Legislature finds and declares that the California
Pollution Control Financing Authority should work in conjunction with
public and private sector entities, including, but not limited to,
cities, counties, school districts, redevelopment agencies, and
financial institutions, to assist in financing the costs of
performing or obtaining site assessments, remedial action plans
technical assistance, and, reports, and where it is determined that a
site has the potential for economically beneficial reuse, the
cleanup, remediation, or development of brownfield sites.  The loan
program provided by this division is in the public interest, serves a
public purpose, and will promote the health, welfare, and safety of
the citizens of the State of California.
  SEC. 1.5.  Section 44501 of the Health and Safety Code is amended
to read:
   44501.  (a) The Legislature hereby finds and declares that it is
necessary and essential that the state, in cooperation with the
federal government, use all practical means and measures to control,
remediate, and eliminate pollution hazards to the environment.  The
Legislature further finds and determines that industry within this
state utilizes processes and facilities that have significant
environmental impact.  These processes and facilities shall be
modified and supplemented to meet the quality standards established
and to be established for the control and remediation of
environmental pollution.  Industry needs and requires new methods to
finance the capital outlays required for the devices, equipment, and
facilities utilized in pollution control if they are to rapidly
comply with the quality standards established by the state and
federal governments, and if they are to rapidly remediate
contaminated properties so that those properties can be reused for
economically beneficial purposes.
   (b) The Legislature also finds and declares that the disposal of
waste products by such current methods as incineration and landfill
pollute the environment by degrading air and water quality.  The
Legislature further finds that in order to reduce the environmental
pollution that currently occurs in connection with the disposal of
waste products, there is a need to develop new and alternative
processes and facilities that provide for the disposal of those waste
products in ways that prevent or reduce environmental degradation.
The Legislature also finds that  those new and alternative processes
and facilities include those that recover resources and energy from
waste products.  The Legislature further finds and declares that in
order to prevent further environmental degradation resulting from
contamination caused by the release of waste products and hazardous
materials, there is a need to encourage the remediation of that
contamination of properties with the potential for economically
beneficial reuse.
   (c) The alternate method of financing provided in this division is
in the public interest and serves a public purpose and will promote
the health, welfare, and safety of the citizens of the State of
California.
   (d) The Legislature also finds and declares that California is
expected to undergo tremendous population growth by the addition of
an estimated five million new jobs, 12 million new residents, and
over four million new households over the next 20 years.  This
constitutes more rapid growth than California experienced during the
1950's, 1960's, and 1970's, combined.  The Legislature also finds
that as a result of this unprecedented growth, the long-term
environmental quality of the state depends, in part, on altering
current growth patterns by adopting policies and programs that
promote new forms of sustainable development and that will help
reduce pollution and the degradation of the environment.  The
Legislature also finds that a key element of sustainable development
is infill development and the revitalization of existing communities.
  Sustainable development will result in the remediation of
brownfields, reduce traffic and auto pollution, and help preserve
open spaces.  The Legislature also finds that many communities in
California do not have the resources or expertise to identify and
compete for state, federal, or private assistance in order to develop
and implement environmentally sensitive growth policies and programs
for economically struggling neighborhoods.  The Legislature further
finds and declares that assisting economically distressed counties
and cities to develop and implement sustainable and environmentally
sensitive growth policies and programs that increase the utilization
of unproductive properties within existing communities will help
reduce environmental hazards created by brownfields and traffic
congestion, while aiding in the revitalization of economically
struggling neighborhoods and the preservation of open space at the
urban edges.  The grant and loan program provided in this division is
in the public interest, serves a public purpose, and will promote
the health, welfare, and safety of the citizens of the State of
California.
   (e) (1) The Legislature also finds and declares that real property
contaminated with hazardous substances is a continuing blight on
communities.  Estimates suggest there are between 67,000 and 119,000
contaminated sites, commonly referred to as "brownfields," throughout
the state.  Located in existing communities, many of these sites are
abandoned, idle, or underutilized due to a combination of factors,
including legal liability concerns, regulatory issues, and the costs
of pollution cleanup.  Additionally, many of the undeveloped
brownfields in the state are located within communities with
depressed land values and pressing economic need, communities often
characterized by a lack of capital investment.  The remediation and
development of brownfields is an important component of revitalizing
existing communities and supporting sustainable growth patterns.
While remediation and development activities should focus on
brownfield sites that, although contaminated, have the potential for
economically beneficial reuse, there currently exist few, if any,
sources for financing the assessment, planning, and reporting
activities that are the necessary first steps toward determining
whether a site has the potential for economically beneficial reuse.
   (2) The Legislature finds and declares that the California
Pollution Control Financing Authority should work in conjunction with
public and private sector entities, including, but not limited to,
cities, counties, school districts, redevelopment agencies, and
financial institutions, to assist in financing, through loans, the
cost of performing or obtaining site assessments , remedial action
plans technical assistance, and, reports, and where it is determined
that a site has the potential for economically beneficial reuse, the
cleanup, remediation, or development of brownfield sites.  The loan
program provided by this division is in the public interest, serves a
public purpose, and will promote the health, welfare, and safety of
the citizens of the State of California.
  SEC. 2.  Section 44502 of the Health and Safety Code is amended to
read:
   44502.  It is the purpose of this division to carry out and make
effective the findings of the Legislature and to that end to do both
of the following, to the mutual benefit of the people of the state
and to protect their health and welfare:
   (1) To provide industry within the state, irrespective of company
size, with an alternative method of financing in providing,
enlarging, and establishing pollution control facilities that are
needed to accomplish the purposes of this division.
   (2) To assist with the financing of the costs of assessment,
remedial planning and reporting, technical assistance, and the
cleanup, remediation, or development of brownfield sites, or other
similar or related costs.
  SEC. 2.5.  Section 44502 of the Health and Safety Code is amended
to read:
   44502.  It is the purpose of this division to carry out and make
effective the findings of the Legislature and to that end to do all
of the following, to the mutual benefit of the people of the state
and to protect their health and welfare:
   (a) To provide industry within the state, irrespective of company
size, with an alternative method of financing in providing,
enlarging, and establishing pollution control facilities  that are
needed to accomplish the purposes of this division.
   (b) To assist economically distressed counties and cities to
develop and implement growth policies and programs that reduce
pollution hazards and the degradation of the environment or promote
infill development.
   (c) To assist with the financing of the costs of assessment,
remedial planning and reporting, technical assistance, and the
cleanup, remediation, or development of brownfield sites, or other
similar or related costs.
  SEC. 3.  Section 44504.1 is added to the Health and Safety Code, to
read:
   44504.1.  "Brownfield site" means a real estate parcel or
improvements located on the parcel, or both that parcel and the
improvements, which is abandoned, idled, or underused, due to real or
perceived environmental contamination, including, but not limited
to, soil or groundwater contamination, the presence of underground
storage tanks, or the presence of asbestos or lead paint on the
parcel or in the improvements located on the parcel, which after
assessment and planning, is determined to have a reasonable potential
for economically beneficial reuse.
  SEC. 4.  Section 44507 of the Health and Safety Code is amended to
read:
   44507.  "Pollution" means an alteration of the quality of the
environment of the state and shall be determined by the various
standards prescribed from time to time by this state, the federal
government, or any agency, department, or political subdivision of
this state or the federal government, and may include, but is not
limited to, earth, air, or water pollution, pollution caused by solid
or hazardous waste disposal, thermal pollution, radiation
contamination, the release of hazardous materials, or noise
pollution.  Pollution also includes, but is not limited to, the
contamination of soil or groundwater resulting from the release of
hazardous materials, as defined in Section 25260, or the presence of
asbestos or lead paint, at sites with a reasonable potential for
economically beneficial reuse.
  SEC. 5.  Section 44520 of the Health and Safety Code is amended to
read:
   44520.  (a) The authority shall, in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, adopt all necessary rules and regulations to
carry out its powers and duties under this division.  The authority
may call upon any board or department of the state government for aid
and assistance in the preparation of plans and specifications and in
the development of technology necessary to effectively control
pollution.
   (b) Notwithstanding subdivision (a), the authority, or any other
agency implementing a small business or brownfield site financing
assistance program pursuant to an interagency agreement with the
authority, may adopt regulations relating to small business or
brownfield site financing as emergency regulations in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.  For purposes of that Chapter 3.5,
including Section 11349.6 of the Government Code, the adoption of
the regulations shall be considered by the Office of Administrative
Law to be necessary for the immediate preservation of the public
peace, health and safety, and general welfare.  Notwithstanding
subdivision (e) of Section 11346.1 of the Government Code, the
regulations shall be repealed 180 days after their effective date,
unless the adopting authority or agency complies with that Chapter
3.5, as provided in subdivision (e) of Section 11346.1 of the
Government Code.
  SEC. 5.5.  Section 44520 of the Health and Safety Code is amended
to read:
   44520.  (a) The authority shall, in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, adopt all necessary rules and regulations to
carry out its powers and duties under this division.  The authority
may call upon any board or department of the state government for aid
and assistance in the preparation of plans and specifications and in
the development of technology necessary to effectively control
pollution.
   (b) Notwithstanding subdivision (a), the authority, or any other
agency implementing a small business or brownfield site financing
assistance program pursuant to an interagency agreement with the
authority, may adopt regulations relating to small business or
brownfield site financing as emergency regulations in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.  For purposes of that Chapter 3.5,
including Section 11349.6 of the Government Code, the adoption of
the regulations shall be considered by the Office of Administrative
Law to be necessary for the immediate preservation of the public
peace, health and safety, and general welfare.  Notwithstanding
subdivision (e) of Section 11346.1 of the Government Code, the
regulations shall be repealed 180 days after their effective date,
unless the adopting authority or agency complies with that Chapter
3.5, as provided in subdivision (e) of Section 11346.1 of the
Government Code.
   (c) Notwithstanding subdivision (a), the authority, or any other
agency implementing a loan program pursuant to an interagency
agreement with the authority, may adopt regulations relating to the
loans authorized under subdivision (g) of Section 44526 as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
For purposes of that Chapter 3.5, including Section 11349.6 of the
Government Code, the adoption of the regulations shall be considered
by the Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare.  Notwithstanding subdivision (e) of Section 11346.1 of the
Government Code, the regulations shall be repealed 180 days after
their effective date, unless the adopting authority or agency
complies with that Chapter 3.5, as provided in subdivision (e) of
Section 11346.1 of the Government Code.
  SEC. 6.  Section 44525 of the Health and Safety Code is amended to
read:
   44525.  (a) The authority may charge reasonable application and
project fees to reimburse the authority for costs incurred in
administering applications for financing pursuant to this division
and to support authority programs, including, but not limited to, the
Capital Access Loan Program authorized by Article 8 (commencing with
Section 44559), and loans, as authorized by subdivision (g) of
Section 44526.
   (b) This section shall become operative only if Assembly Bill 779
of the 1999-2000 Regular Session is not enacted.
  SEC. 6.6.  Section 44525 of the Health and Safety Code is amended
to read:
   44525.  (a) The authority may charge reasonable application and
project fees to reimburse the authority for costs incurred in
administering applications for financing pursuant to this division
and to support authority programs, including, but not limited to, the
Capital Access Loan Program authorized by Article 8 (commencing with
Section 44559, and loans, as authorized by subdivision (h) of
Section 44526.
   (b) This section shall become operative only if Assembly Bill 779
of the 1999-2000 Regular Session is enacted.
  SEC. 7.  Section 44525.7 is added to the Health and Safety Code, to
read:
   44525.7.  (a) Commencing in 2002, and annually thereafter, the
authority shall submit a report to the Legislature regarding the loan
program described in subdivision (g) of Section 44526.
   (b) This section shall not become operative if Assembly Bill 779
of the 1999-2000 Regular Session is enacted.
  SEC. 7.5.  Section 44525.7 is added to the Health and Safety Code,
to read:
   44525.7.  (a) Commencing in 2002, and annually thereafter, the
authority shall submit a report to the Legislature regarding the loan
program described in subdivision (h) of Section 44526.
   (b) This section shall become operative only if Assembly Bill 779
of the 1999-2000 Regular Session is enacted.
  SEC. 8.  Section 44526 of the Health and Safety Code is amended to
read:
   44526.  The authority is authorized:
   (a) To determine the location and character of any project to be
financed under the provisions of this division, to lend financial
assistance to any participating party, to construct, reconstruct,
renovate, replace, lease, as lessor or lessee, and regulate the same,
and to enter into contracts for the sale of any pollution control
facilities, including installment sales or sales under conditional
sales contracts, and to make loans to participating parties to lend
financial assistance in the acquisition, construction, or
installation of a project.
   (b) To issue bonds, notes, bond anticipation notes, and other
obligations of the authority for any of its corporate purposes, and
to fund or refund the same, all as provided in this division.
   (c) To fix fees and charges for pollution control facilities, and
to revise from time to time those fees and charges, and to collect
rates, rents, fees, and charges for the use of and for any facilities
or services furnished, or to be furnished, by a project or any part
thereof and to contract with any person, partnership, association,
corporation, or public agency with respect thereto, and to fix the
terms and conditions upon which any pollution control facilities may
be sold or disposed of, whether upon installment sales contracts or
otherwise.
   (d) To employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and sale of any bonds, notes, bond
anticipation notes, or other obligations of the authority; to
contract for engineering, architectural, accounting, or other
services of appropriate agencies as may be necessary in the judgment
of the authority for the successful development of any project; and
to pay the reasonable costs of consulting engineers, architects,
accountants, and construction experts employed by any participating
party if, in the judgment of the authority, those services are
necessary to the successful development of any project, and those
services are not obtainable from any public agency.
   (e) To receive and accept loans, contributions, or grants, in
money, property, labor, or other things of value, for, or in aid of,
the authority in carrying out the purposes of this division, from any
source including, but not limited to, the federal government, the
state, or any agency of the state, any local government or agency
thereof, or any nonprofit or for-profit private entity or individual.

   (f) To apply for, and accept, subventions, grants, loans,
advances, and contributions from any source, of money, property,
labor, or other things of value.  The sources may include, but are
not limited to, bond proceeds, dedicated taxes, state appropriations,
federal appropriations, federal grant and loan funds, public and
private sector retirement system funds, and proceeds of loans from
the Pooled Money Investment Account.
   (g) (1) To provide a loan directly, or indirectly through one or
more public or private sector intermediaries, to any city, county,
school district, redevelopment agency, financial institution, as
defined in subdivision (d) of Section 44559.1, a for-profit or
not-for-profit organization, or participating party, as defined in
Section 44506, to assist in financing, among other things, the costs
of performing or obtaining brownfield site assessments, remedial
action plans and reports, technical assistance, the cleanup,
remediation, or development of brownfield sites, or any other similar
or related costs, subject to all applicable federal, state, and
local laws, procedures, and regulations.
   (2) The authority shall establish standards and criteria to ensure
that a recipient of direct or indirect financing for cleanup or
remediation pursuant to this subdivision has the necessary financial
resources and expertise to successfully and appropriately complete
the cleanup or remediation of the property.
   (3) The authority may pay all, or a portion, of the associated
program development and implementation costs of any public or private
sector intermediaries through which a loan is made.  A loan
authorized by this subdivision is subject to both of the following:
   (A) A loan may be used in connection with a brownfield site prior
to a determination of whether the site has a reasonable potential for
economically beneficial reuse.
   (B) A loan may be made upon the terms determined by the authority
and may provide for any rate of interest or no interest.
   (4) The authority shall fund a loan made pursuant to this
subdivision from any funds available to it, from any funds set aside
for the authority's administrative expenses, or from any small
business assistance fund established for these purposes pursuant to
Section 44548.
   (5) The authority may waive repayment of all, or a portion, of any
loan made pursuant to this subdivision upon conditions to be
determined by the authority, and the amount so waived shall be deemed
a grant to the recipient.
   (h) To do all things generally necessary or convenient to carry
out the purposes of this division.
  SEC. 8.5.  Section 44526 of the Health and Safety Code is amended
to read:
   44526.  The authority is authorized:
   (a) To determine the location and character of any project to be
financed under the provisions of this division, to lend financial
assistance to any participating party, to construct, reconstruct,
renovate, replace, lease, as lessor or lessee, and regulate the same,
and to enter into contracts for the sale of any pollution control
facilities, including installment sales or sales under conditional
sales contracts, and to make loans to participating parties to lend
financial assistance in the acquisition, construction, or
installation of a project.
   (b) To issue bonds, notes, bond anticipation notes, and other
obligations of the authority for any of its corporate purposes, and
to fund or refund the same, all as provided in this division.
   (c) To fix fees and charges for pollution control facilities, and
to revise from time to time  those fees and charges, and to collect
rates, rents, fees, and charges for the use of and for any facilities
or services furnished, or to be furnished, by a project or any part
thereof and to contract with any person, partnership, association,
corporation, or public agency with respect thereto, and to fix the
terms and conditions upon which any pollution control facilities may
be sold or disposed of, whether upon installment sales contracts or
otherwise.
                                                          (d) To
employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and sale of any bonds, notes, bond
anticipation notes, or other obligations of the authority; to
contract for engineering, architectural, accounting, or other
services of appropriate agencies as may be necessary in the judgment
of the authority for the successful development of any project; and
to pay the reasonable costs of consulting engineers, architects,
accountants, and construction experts employed by any participating
party if, in the judgment of the authority,  those services are
necessary to the successful development of any project, and  those
services are not obtainable from any public agency.
   (e) To receive and accept loans, contributions, or grants, in
money, property, labor, or other things of value, for, or in aid of,
the authority in carrying out the purposes of this division, from any
source including, but not limited to, the federal government, the
state, or any agency of the state, any local government or agency
thereof, or any nonprofit or for-profit private entity or individual.

   (f) To apply for, and accept, subventions, grants, loans,
advances, and contributions from any source, of money, property,
labor, or other things of value.  The sources may include, but are
not limited to, bond proceeds, dedicated taxes, state appropriations,
federal appropriations, federal grant and loan funds, public and
private sector retirement system funds, and proceeds of loans from
the Pooled Money Investment Account.
   (g) To provide grants and loans to any city or county deemed
eligible by the authority.  The grants and loans shall be used to
assist California neighborhoods suffering from high poverty or
unemployment levels, or from low-income levels, to assist cities and
counties in developing and implementing growth policies and programs
that reduce pollution hazards and the degradation of the environment,
or in promoting infill development to revitalize these communities.
The grants and loans may be used to employ the technical expertise
necessary to identify, assess, and complete applications for state,
federal, and private economic assistance programs that develop and
implement sustainable development and sound environmental policies
and programs.  Priority shall be given to applicants lacking the
resources to identify, assess, and complete applications for economic
assistance, and for those lacking the resources to develop and
implement sustainable growth and other sound environmental policies
and programs.  The authority shall fund these grants and loans from
any funds available to the authority or set aside for the authority's
administrative expenses.  The authority may not award more than two
million five hundred thousand dollars ($2,500,000) in grants and
loans pursuant to this subdivision.  This subdivision shall remain
operative only until January 1, 2007, and as of that date is no
longer operative, unless a later enacted statute that is enacted
before January 1, 2007, deletes or extends that date.
   (h) (1) To provide a loan directly, or indirectly through one or
more public or private sector intermediaries, to any city, county,
school district, redevelopment agency, financial institution, as
defined in subdivision (d) of Section 44559.1, for-profit or
not-for-profit organization, or participating party, as defined in
Section 44506, to assist in financing, among other things, the costs
of performing or obtaining brownfield site assessments, remedial
action plans and reports, technical assistance, the cleanup,
remediation, or development of brownfield sites, or any other similar
or related costs, subject to all applicable federal, state, and
local laws, procedures, and regulations.
   (2) The authority shall establish standards and criteria to ensure
that a recipient of direct or indirect financing for cleanup or
remediation pursuant to this subdivision has the necessary financial
resources and expertise to successfully and appropriately complete
the cleanup or remediation of the property.
   (3) The authority may pay all, or a portion, of the associated
program development and implementation costs of any public or private
sector intermediaries through which a loan is made.  A loan
authorized by this subdivision is subject to both of the following:
   (A) A loan may be used in connection with a brownfield site prior
to a determination of whether the site has a reasonable potential for
economically beneficial reuse.
   (B) A loan may be made upon the terms determined by the authority
and may provide for any rate of interest or no interest.
   (4) The authority shall fund a loan made pursuant to this
subdivision from any funds available to it, from any funds set aside
for the authority's administrative expenses, or from any small
business assistance fund established for these purposes pursuant to
Section 44548.
   (5) The authority may waive repayment of all, or a portion, of any
loan made pursuant to this subdivision upon conditions to be
determined by the authority, and the amount so waived shall be deemed
a grant to the recipient.
   (i) To do all things generally necessary or convenient to carry
out the purposes of this division.
  SEC. 9.  Section 44537.5 of the Health and Safety Code is amended
to read:
   44537.5.  The authority shall provide the maximum opportunity for
the use of the authority's financing by individuals, businesses
engaged in agricultural operations, and small businesses or
corporations by providing information, assistance, and coordination
to facilitate financing for small projects and other financing that
benefits the environment and the economy of the state, including
financing for projects for the disposal of agricultural wastes, with
special attention to the needs of businesses that do not meet
standard commercial lending requirements but provide public benefits,
such as job creation or retention and the redevelopment for
economically beneficial uses of contaminated properties.  The
authority shall assist with the financing of the costs of, among
other things, assessment, remedial planning and reporting, technical
assistance, and cleanup, remediation, or development of brownfield
sites, and any other similar or related costs, by providing the loans
authorized pursuant to subdivision (g) of Section 44526.  The
authority shall provide the maximum opportunity to provide loan
funding pursuant to subdivision (g) of Section 44526 to assist
brownfield site financing assistance programs where the sites are
located in economically struggling communities suffering from a low
level of income or a high level of poverty or unemployment.
  SEC. 10.  Section 44548 of the Health and Safety Code is amended to
read:
   44548.  (a) (1) Subject to any prior contractual obligations to
any of its bondholders, the authority may establish one or more small
business assistance funds in order to do any of the following:
   (A) Assist small businesses to achieve financing of pollution
control facilities.
   (B) Assist with the financing of the costs of, among other things,
assessment, remedial planning and reporting, technical assistance,
cleanup, remediation, and development of brownfield sites, and with
other similar or related costs, by providing loans pursuant to
subdivision (g) of Section 44526.
   (C) Fund a capital access program for small businesses pursuant to
Article 8 (commencing with Section 44559).
   (2) For the purpose of establishing and maintaining small business
assistance funds as it determines to be necessary or desirable to
secure its bonds or any issuance thereof or for other authorized
purposes, the authority, pursuant to its contracts with participating
parties, may levy fees or other charges on, or require deposits
from, participating parties receiving financing for a project under
this division.  The total amount of these fees, charges, and deposits
with respect to a single issue of bonds shall not exceed 3 percent
of the principal amount of that issue of bonds.
   (3) Prior to levying any fees or charges or requiring deposits,
the authority shall adopt regulations for the operation of the small
business assistance funds, the amounts and any payment schedule for
the fees, charges, or deposits, eligibility standards for small
businesses desiring to use or benefit from the small business
assistance funds, and any other matters the authority determines to
be necessary for the establishment and maintenance of small business
assistance funds.  The regulations may provide for differential fees
from participating parties based upon the size of a project financed
by the authority or other factors determined to be relevant by the
authority, and the regulations may restrict any benefits to those
eligible small businesses specified in the regulations.
   (4) The authority may transfer any funds available to it or set
aside for its administrative expenses to any small business
assistance fund established under this section.
   (b) The forms of financial assistance that the authority may
provide under this section include, but are not limited to, payments
to reduce, but not eliminate, the interest rate on loans; payments of
part or all of the cost of acquiring letters of credit, insurance,
guarantees, or other forms of credit support; and payment of part or
all of the authority's expenses in issuing revenue bonds or providing
other assistance.  The authority may also pledge any small business
assistance fund, on an individual or pooled basis, to repay, directly
or indirectly, the principal of, or interest or premium on, any
issue of bonds of the authority or any loan made or acquired pursuant
to this section.  The authority may also use moneys in a small
business assistance fund to assist in the financing of the costs of
assessment, remedial planning and reporting, technical assistance,
cleanup, remediation or development of brownfield sites, and of other
similar or related costs, by providing loans, pursuant to, and under
the terms permitted by, subdivision (g) of Section 44526.  In
addition to other purposes set forth in this section, the authority
may use moneys in a small business assistance fund to make or acquire
loans or guarantee commercial loans to participating parties
eligible for assistance from those funds.  Any moneys repaid or
returned to the authority in connection with or as a result of any
loan or financial assistance made pursuant to this section shall be
deposited in the small business assistance fund from which the loan
or assistance was originally provided.  The authority may contract
with qualified financial institutions, including, but not limited to,
banks, investment and mortgage bankers, insurance companies,
sureties, and guarantors, to provide any necessary assistance in the
granting of credit for these purposes.
   (c) Each small business assistance fund established pursuant to
this section shall be deposited in a special account that the
Controller shall create.  Notwithstanding any other provision of law,
and subject to any requirements of federal tax law or regulations
relative to maintaining the tax-exempt status of the obligations of
the authority, all interest or other gains earned by investment or
deposit of money in the special account pursuant to any provision of
Part 2 (commencing with Section 16300) of Division 4 of Title 2 of
the Government Code or pursuant to any other provision of law shall
be credited to, and deposited in, the account.
   (d) In carrying out this section, the authority shall participate
with the air pollution control districts and air quality management
districts in providing financial assistance in its lending programs.

  SEC. 11.  Section 44559 of the Health and Safety Code is amended to
read:
   44559.  (a) The Legislature finds and declares that small
businesses are responsible for a significant amount of environmental
emissions in the state, but are less able than larger businesses to
afford the investment in new equipment or process modifications
needed to comply with environmental regulations, with regard to
controlling emissions, preventing the creation of pollutants,
contaminants, or waste products, and remediating contamination of
properties with a reasonable potential for economically beneficial
reuse.  Additionally, small businesses faced with financial pressures
will be likely to reduce expenditures to achieve environmental
compliance.  Better access to capital will allow small businesses to
more easily comply with environmental mandates, and to remediate
contamination of properties with a reasonable potential of
economically beneficial reuse, and to succeed economically,
generating additional revenue to state and local governments that can
be used for environmental improvements, all to the benefit of all
the residents of the state.
   (b) The Legislature also finds and declares that it is in the best
interest of the state to expand the Capital Access Loan Program for
small business regardless of whether the operations of the small
business affect the environment, and to permit business loans to be
included in the program for small businesses whose operations do not,
necessarily, affect the environment.  Small businesses have
difficulty gaining access to capital for startup and expansion
purposes.  Small businesses owned by minorities and women have
special capital access difficulties.  In addition, small businesses
operating in areas affected by military base closures are
disadvantaged by limited access to capital.  The Legislature finds
that improving access to capital for these small businesses will spur
investment, create jobs, expand economic opportunities, assist in
the recovery of communities affected by defense and aerospace losses,
assist in the recovery of neighborhoods and communities affected by
contaminated properties that are not being used for economically
beneficial purposes but which could be so used if the contamination
was remediated, and help sustain and strengthen economic recovery in
California.
  SEC. 12.  Section 44559.1 of the Health and Safety Code is amended
to read:
   44559.1.  As used in this article, unless the context requires
otherwise:
   (a) "Authority" means the California Pollution Control Financing
Authority.
   (b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
   (c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
   (d) "Financial institution" means a federal or state-chartered
bank, savings association, credit union, not-for-profit community
development financial institution certified under Part 1805
(commencing with Section 1805.100) of Chapter XVIII of Title 12 of
the Code of Federal Regulations, or a consortium of these entities.
A consortium of those entities may include a nonfinancial
corporation, if the percentage of capitalization by all nonfinancial
corporations in the consortium does not exceed 49 percent.
   (e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purposes of the following:
   (1) Depositing all required fees paid by the participating
financial institution and the qualified business.
   (2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
   (3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
   (f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
   (g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
   (1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
   (2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
   (h) "Program" means the Capital Access Loan Program created
pursuant to this article.
   (i) "Qualified business" means a small business concern that meets
both of the following criteria, regardless of whether the small
business concern has operations that affect the environment:
   (1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
   (2) It has its primary business location within the boundaries of
the state.
   (j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California.  A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment.  A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
   (2) "Qualified loan" does not include any of the following:
   (A) A loan for the construction or purchase of residential
housing.
   (B) A loan to finance passive real estate ownership.
   (C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
   (D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
   (k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
   (l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
   (m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.
  SEC. 12.5.  Section 44559.1 of the Health and Safety Code is
amended to read:
   44559.1.  As used in this article, unless the context requires
otherwise:
   (a) "Authority" means the California Pollution Control Financing
Authority.
   (b) "California Capital Access Fund" means a fund created within
the authority to be used for purposes of the program.
   (c) "Executive director" means the Executive Director of the
California Pollution Control Financing Authority.
   (d) "Financial institution" means a federal- or state-chartered
bank, savings association, credit union, not-for-profit community
development financial institution certified under Part 1805
(commencing with Section 1805.100) of Chapter XVIII of Title 12 of
the Code of Federal Regulations, or a consortium of these entities.
A consortium of those entities may include a nonfinancial
corporation, if the percentage of capitalization by all nonfinancial
corporations in the consortium does not exceed 49 percent.
"Financial institution" also includes a lending institution that has
executed a participation agreement with the Small Business
Administration under the guaranteed loan program pursuant to Part 120
(commencing with Section 120.1) of Chapter I of Title 13 of the Code
of Federal Regulations and meets the requirements of Section 120.410
of Chapter I of Title 13 of the Code of Federal Regulations, and a
small business investment company licensed pursuant to Part 107
(commencing with Section 107.20) of Chapter I of Title 13 of the Code
of Federal Regulations.  A financial institution described in this
subdivision shall be domiciled or have its principal office in the
State of California.
   (e) "Loss reserve account" means an account in the State Treasury
or any financial institution that is established and maintained by
the authority for the benefit of a financial institution
participating in the Capital Access Loan Program established pursuant
to this article for the purposes of the following:
   (1) Depositing all required fees paid by the participating
financial institution and the qualified business.
   (2) Depositing contributions made by the state and, if applicable,
the federal government or other sources.
   (3) Covering losses on enrolled qualified loans sustained by the
participating financial institution by disbursing funds accumulated
in the loss reserve account.
   (f) "Participating financial institution" means a financial
institution that has been approved by the authority to enroll
qualified loans in the program and has agreed to all terms and
conditions set forth in this article and as may be required by any
applicable federal law providing matching funding.
   (g) "Passive real estate ownership" means ownership of real estate
for the purpose of deriving income from speculation, trade, or
rental, but does not include any of the following:
   (1) The ownership of that portion of real estate being used or
intended to be used for the operation of the business of the owner of
the real estate.
   (2) The ownership of real estate for the purpose of construction
or renovation, until the completion of the construction or renovation
phase.
   (h) "Program" means the Capital Access Loan Program created
pursuant to this article.
   (i) "Qualified business" means a small business concern that meets
both of the following criteria, regardless of whether the small
business concern has operations that affect the environment:
   (1) It is a corporation, partnership, cooperative, or other
entity, whether that entity is a nonprofit entity or an entity
established for profit, that is authorized to conduct business in the
state.
   (2) It has its primary business location within the boundaries of
the state.
   (j) (1) "Qualified loan" means a loan or a portion of a loan made
by a participating financial institution to a qualified business for
any business activity that has its primary economic effect in
California.  A qualified loan may be made in the form of a line of
credit, in which case the participating financial institution shall
specify the amount of the line of credit to be covered under the
program, which may be equal to the maximum commitment under the line
of credit or an amount that is less than that maximum commitment.  A
qualified loan made under the program may be made with the interest
rates, fees, and other terms and conditions agreed upon by the
participating financial institution and the borrower.
   (2) "Qualified loan" does not include any of the following:
   (A) A loan for the construction or purchase of residential
housing.
   (B) A loan to finance passive real estate ownership.
   (C) A loan for the refinancing of an existing loan when and to the
extent that the outstanding balance is not increased.
   (D) A loan, the proceeds of which will be used in any manner that
could cause the interest on any bonds previously issued by the
authority to become subject to federal income tax.
   (k) "Severely affected community" means any area classified as an
enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code), any area, as designated by the executive director,
contiguous to the boundaries of a military base designated for
closure pursuant to Section 2687 of Title 10 of the United States
Code, as amended, and any other comparable economically distressed
geographic area so designated by the executive director from time to
time.
   (l) "Small Business Assistance Fund" means a fund created within
the authority pursuant to Section 44548.
   (m) "Small business concern" has the same meaning as in Section
632 of Title 15 of the United States Code, or as otherwise provided
in regulations of the authority.
  SEC. 13.  Section 44559.2 of the Health and Safety Code is amended
to read:
   44559.2.  (a) The authority may contract with any financial
institution for the purpose of allowing the financial institution to
participate in the Capital Access Loan Program established by this
article.
   (b) For purposes of this section, the authority may contract with
participating financial institutions and shall utilize a standard
form of contract that is reviewed and approved by the Department of
General Services.  The standard form of contract shall provide for
all of the following:
   (1) The creation of a loss reserve account by the authority for
the benefit of the financial institution.
   (2) The financial institution, qualified business, and the
authority will deposit moneys to the credit of the institution's loss
reserve account when the financial institution makes a qualified
loan to a qualified business.
   (3) The liability of the state and the authority to the financial
institution under the contract is limited to the amount of money
credited to the loss reserve account of the institution.
   (4) The financial institution shall provide the information that
the authority may require, including financial information that is
identifiable with, or identifiable from the financial records of a
particular customer who is the recipient of a qualified loan.  In
addition to any other information that the authority may require, the
financial institution shall provide the complete Standard Industrial
Classification (SIC) code for the qualified business and information
that provides the precise geographic location of both the qualified
business and the borrower, if different.

     (5) The financial institution will file a report with the
executive director setting out a full description of the board of
directors, including size, race, ethnicity, and gender.
   (6) The participating financial institution will require each
borrower, prior to receiving a loan under the program, to sign a
written representation to the participating financial institution
that the borrower has no legal, beneficial, or equitable interest in
the nonrefundable premium charges or any other funds credited to the
loss reserve account established by the authority for the
participating financial institution.
   (7) Other terms that the authority may require for purposes of
this article.
   (c) A financial institution is not subject to laws restricting the
disclosure of financial information when the financial institution
provides information to the authority as required by paragraph (4) of
subdivision (b).
   (d) A credit union operating pursuant to a certificate issued
under the California Credit Union Law (Division 5 (commencing with
Section 14000) of the Financial Code) may participate in the Capital
Access Loan Program established pursuant to this article only to the
extent participation is in compliance with the California Credit
Union Law.  Nothing in this article shall be construed to limit the
authority of the Commissioner of Financial Institutions to regulate
credit unions subject to the commissioner's jurisdiction under the
California Credit Union Law.
   (e) Any individual, company, corporation, institution, utility,
government agency, or other entity, including any consortium of these
persons or entities, whether public or private, may participate in
the Capital Access Loan Program established pursuant to this article
by depositing funds in the California Capital Access Fund under those
terms and conditions as may be deemed appropriate by the authority.

  SEC. 14.  Section 1.5 of this bill incorporates amendments to
Section 44501 of the Health and Safety Code proposed by both this
bill and AB 779.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2001, (2)
each bill amends Section 44501 of the Health and Safety Code, and (3)
this bill is enacted after AB 779, in which case Section 1 of this
bill shall not become operative.
  SEC. 15.  Section 2.5 of this bill incorporates amendments to
Section 44502 of the Health and Safety Code proposed by both this
bill and AB 779.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2001, (2)
each bill amends Section 44502 of the Health and Safety Code, and (3)
this bill is enacted after AB 779, in which case Section 2 of this
bill shall not become operative.
  SEC. 16.  Section 5.5 of this bill incorporates amendments to
Section 44520 of the Health and Safety Code proposed by both this
bill and AB 779.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2001, (2)
each bill amends Section 44520 of the Health and Safety Code, and (3)
this bill is enacted after AB 779, in which case Section 5 of this
bill shall not become operative.
  SEC. 17.  Section 8.5 of this bill incorporates amendments to
Section 44526 of the Health and Safety Code proposed by both this
bill and AB 779.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2001, (2)
each bill amends Section 44526 of the Health and Safety Code, and (3)
this bill is enacted after AB 779, in which case Section 8 of this
bill shall not become operative.
  SEC. 18.  Section 12.5 of this bill incorporates amendments to
Section 44559.1 of the Health and Safety Code proposed by both this
bill and AB 2805.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2001, (2)
each bill amends Section 44559.1 of the Health and Safety Code, and
(3) this bill is enacted after AB 2805, in which case Section 12 of
this bill shall not become operative.
